This Dividend Stock Yielding Quadruple the S&P 500 Looks Like a Buy Right Now

If you haven’t given dividend-paying stocks much thought, you might want to start. Check out the table below to see why:

Data source: Ned Davis Research and Hartford Funds.

See? Dividend-paying stocks are not just for retirees. You can use dividend income to live off of — or you can use it to invest in more stocks.

Here’s a solid contender for your long-term portfolio: PepsiCo (PEP +2.65%). Its dividend recently yielded a fat 4.4% — which is more than quadruple the S&P 500‘s dividend yield of about 1.1%.

Is it going to make you a mint within a few years? Nope — it’s not a growth stock. But it’s a grower — with third-quarter revenue up 3% year over year. Its dividend is growing, too. The total annual payout of $5.92 per share is up from $4.60 in 2022 and $3.22 in 2017.

PepsiCo should be especially appealing if you’re worried about a stock market crash, because people tend to buy its offerings in good economies and bad — largely because they only cost a few dollars. The company’s snacks-and-drinks portfolio features brands such as Lay’s, Doritos, Cheetos, and Quaker alongside Gatorade, Pepsi-Cola, Mountain Dew, and SodaStream.

Another plus is that the shares look attractively priced at recent levels, with a forward-looking price-to-earnings (P/E) ratio of 15.5, well below the five-year average of 20.3, and its price-to-sales ratio of 1.86, well below the five-year average of 2.48.

PepsiCo has struggled in recent years as consumers became more health-conscious — with some on weight loss drugs that reduce appetites. But it has been responding by cutting some prices and by introducing healthier products and ingredients. It’s working on turning its fortunes around — and it’s paying shareholders well to wait.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.